Best way to spend your paycheck

People that have broached this subject well before I was even born learned that the best way to spend your paycheck is on your future self. keep in mind that this is by no means the only way to spend your paycheck, however it very well may be the best way to spend your paycheck until you reach the maximum limits allowed.

After looking at my own Social Security benefits statement, readily available from the SS website (www.ssa.gov) about 3 years ago, I realized that I had already earned over $1M in my own lifetime which was after working about 30 years at the time.
I also had a similar discussion with a family member recently regarding retirement planning. They asked a simple question, “If I am barely scraping by with paying all the bills that I have, HOW can I put away for retirement?”. My response was simple as well, after I told them how much they were going to be earning over the next 10 years, I asked them how much of that they were planning on putting away.

Annual paycheck

years of annual paycheck

10

20

30

$20,000

$200,000

$400,000

$600,000

$30,000

$300,000

$600,000

$900,000

$40,000

$400,000

$800,000

$1,200,000

$50,000

$500,000

$1,000,000

$1,500,000

$60,000

$600,000

$1,200,000

$1,800,000

$70,000

$700,000

$1,400,000

$2,100,000

$80,000

$800,000

$1,600,000

$2,400,000

$90,000

$900,000

$1,800,000

$2,700,000

$100,000

$1,000,000

$2,000,000

$3,000,000

As you can plainly see, people who have a household income of slightly more than the median family household income across the U.S. will have earned $1,000,000 within 20 years. Or even if you earned $30,000 and worked for 30 years and your paycheck never increased, you would have earned almost $1M.

Don’t forget that you may or may not ever increase your income for your entire working career, however most people do increase their income substantially and don’t think about it. For instance, when you increase your income from minimum wage ($14,500), to say $20,000, is pretty significant if your expenses are held very low, even for a short period of time.
As I have said in the past, I could have done A LOT better if I didn’t get caught up in the moment, unless that moment was for the future me!

Now that I’ve explained my own bad choices, the question is put forward to you, how much of your own future earnings will you put away for your future self or regret not having done 10 years later?